Segments (Tables)

9 Months Ended

Sep. 30, 2018

Segments

Revenue and Pre-tax Income by Segment

							Technology
				Global			Services &
	Cognitive			Business			Cloud						Global			Total
(Dollars in millions)	Solutions			Services			Platforms			Systems			Financing			Segments
For the three months ended September 30, 2018:
External revenue	$	4,148		$	4,130		$	8,292		$	1,736		$	388		$	18,694
Internal revenue	639			77			240			181			338			1,476
Total revenue	$	4,787		$	4,207		$	8,533		$	1,917		$	726		$	20,170
Pre-tax income from continuing operations	$	1,629		$	579		$	1,075		$	209		$	308		$	3,801
Revenue year-to-year change	(4.8		)%	0.5		%	(1.0		)%	(1.6		)%	4.0		%	(1.5		)%
Pre-tax income year-to-year change	(0.9		)%	30.9		%	(8.6		)%	(37.9		)%	26.9		%	(1.1		)%
Pre-tax income margin	34.0		%	13.8		%	12.6		%	10.9		%	42.5		%	18.8		%
For the three months ended September 30, 2017:
External revenue	$	4,400		$	4,093		$	8,457		$	1,721		$	427		$	19,098
Internal revenue	629			92			164			227			272			1,384
Total revenue	$	5,030		$	4,185		$	8,621		$	1,948		$	698		$	20,482
Pre-tax income from continuing operations *	$	1,643		$	442		$	1,177		$	337		$	243		$	3,843
Pre-tax income margin *	32.7		%	10.6		%	13.7		%	17.3		%	34.8		%	18.8		%

* Recast to reflect adoption of the FASB guidance on presentation of net benefit cost.

							Technology
				Global			Services &
	Cognitive			Business			Cloud						Global			Total
(Dollars in millions)	Solutions			Services			Platforms			Systems			Financing			Segments
For the nine months ended September 30, 2018:
External revenue	$	13,027		$	12,495		$	25,533		$	5,412		$	1,188		$	57,655
Internal revenue	2,122			249			550			576			1,240			4,738
Total revenue	$	15,149		$	12,744		$	26,083		$	5,989		$	2,428		$	62,392
Pre-tax income from continuing operations	$	4,718		$	1,109		$	2,395		$	352		$	1,042		$	9,616
Revenue year-to-year change	0.8		%	2.2		%	2.0		%	10.2		%	11.8		%	2.8		%
Pre-tax income year-to-year change	4.3		%	7.1		%	(15.8		)%	58.8		%	24.8		%	1.7		%
Pre-tax income margin	31.1		%	8.7		%	9.2		%	5.9		%	42.9		%	15.4		%
For the nine months ended September 30, 2017:
External revenue	$	13,021		$	12,196		$	25,079		$	4,863		$	1,246		$	56,405
Internal revenue	2,001			271			497			571			925			4,265
Total revenue	$	15,022		$	12,467		$	25,576		$	5,434		$	2,171		$	60,670
Pre-tax income from continuing operations *	$	4,522		$	1,035		$	2,845		$	222		$	835		$	9,459
Pre-tax income/(loss) margin *	30.1		%	8.3		%	11.1		%	4.1		%	38.5		%	15.6		%

* Recast to reflect adoption of the FASB guidance on presentation of net benefit cost.

Reconciliation of segment revenue to IBM as reported

(Dollars in millions)
For the three months ended September 30:	2018			2017
Revenue:
Total reportable segments	$	20,170		$	20,482
Eliminations of internal transactions	(1,476		)	(1,384		)
Other revenue	62			56
Total consolidated revenue	$	18,756		$	19,153

(Dollars in millions)
For the nine months ended September 30:	2018			2017
Revenue:
Total reportable segments	$	62,392		$	60,670
Eliminations of internal transactions	(4,738		)	(4,265		)
Other revenue	176			192
Total consolidated revenue	$	57,830		$	56,597

Reconciliation of segment pre-tax income to IBM as reported

(Dollars in millions)
For the three months ended September 30:	2018			2017
Pre-tax income from continuing operations:
Total reportable segments	$	3,801		$	3,843	*
Amortization of acquired intangible assets	(207		)	(238		)
Acquisition-related (charges)/income	(2		)	0
Non-operating retirement-related (costs)/income	(389		)	(273		)*
Eliminations of internal transactions	(116		)	(126		)
Unallocated corporate amounts	(91		)	(141		)
Total pre-tax income from continuing operations	$	2,996		$	3,065

* Recast to reflect adoption of the FASB guidance on presentation of net benefit cost.

(Dollars in millions)
For the nine months ended September 30:	2018			2017
Pre-tax income from continuing operations:
Total reportable segments	$	9,616		$	9,459	*
Amortization of acquired intangible assets	(613		)	(731		)
Acquisition-related (charges)/income	(3		)	(19		)
Non-operating retirement-related (costs)/income	(1,185		)	(969		)*
Eliminations of internal transactions	(625		)	(515		)
Unallocated corporate amounts	(283		)	(294		)
Total pre-tax income from continuing operations	$	6,908		$	6,931

* Recast to reflect adoption of the FASB guidance on presentation of net benefit cost.